Forget the Dragon: Its All about the Turkey

By Joe Parkinson

Well, perhaps not—but Istanbul, Turkey’s financial and cultural capital, this week beat a glut of Chinese cities to the top spot of a Brookings Institution ranking of the world’s most dynamic metropolitan centers.

The ‘Global Metro-Monitor’ report, co-authored with the London School of Economics and released Wednesday, ranks cities according to changes in income and employment in the pre-crisis, crisis and post-crisis periods.

Istanbul, which according to the study posted a 7.3% gain in employment and 5.5% rise in gross value added per person—a proxy for income—in the post-crisis period, leapfrogged 144 places to top four Chinese titans in the top ten: Shenzhen, Shanghai, Guangzhou and Beijing.

Clearly, that’s reflective of Turkey’s rapid recovery from the recession, which saw its economy tie China in the second quarter for the fastest growth in the G20.

But is also underscores that Istanbul—a booming city of more than 13 million with a thousand-year tradition as a trading center—is the overwhelming driver of Turkey’s rebound, whereas China’s wealth drivers are more dispersed.

Turkey’s largest city accounts for 27% of Turkey’s economy and 55% of foreign trade, according to Turkstat, the official statistics agency.

Istanbul has developed a swagger in recent years as a rising middle class fuels a consumer boom that is turning the city into a fashion and tourism hub. And the Brooking’s report will offer more fodder for senior government ministers here who are eager to trumpet the city as an international financial center to rival Dubai or eventually even London.

But the government’s plan, spearheaded by economics minister and deputy prime minister Ali Babacan, also faces huge challenges. Turkey’s economy is tiny relative to China’s, whose sheer size has benefited financial centers such as Shanghai and Hong Kong. Many executives say the city’s lifestyle is attractive, but the infrastructure needs updating.

A recent survey of global financial centers by London-based consultancy Z/Yen Group released in October illustrated the gains Istanbul has made, but underlined the improvement that need to be made if it is to become globally competitive.

The city had the most improved scores of any metropolis thanks largely to gains in lifestyle and business confidence, but it still ranked 70th in the world, behind Warsaw, Manila and Glasgow.

via Forget the Dragon: Its All about the Turkey – New Europe – WSJ.